29.11.2022/74
The Law No. 7421, Containing Amendments to Some Tax Laws, Has Been Published
The Law No. 7421, published in the Official Gazette No. 32025 on 26.11.2022, amends various areas, including tax laws, with the enactment of the Law on the Amendment of the Tax Procedure Law and Certain Other Laws.
The tax-related amendments made by this Law are summarized below:
1. The Ministry of Treasury and Finance Has Been Authorized to Collect Guarantees from Taxpayers Engaged in Motor Vehicle Trade.
With the addition of item (10) to the first paragraph of Article 257 (repeated) titled “Authority” of the Tax Procedure Law No. 213, taxpayers engaged in the motor vehicle trade as defined in the Special Consumption Tax Law No. 4760 are required to provide guarantees for the collection of taxes in an amount up to 30 million Turkish liras. The Ministry of Treasury and Finance is authorized to determine the type, amount, time of provision, and conditions for refund or completion of the guarantee by considering the taxpayer’s field of activity, legal status, duration of taxation, asset or equity size, number of employees, any adverse reports or findings related to the use or issue of false or misleading documents, the volume of business or production, and the taxpayer groups. The Ministry is also authorized to reduce the specified amount to zero or double it, and to determine under which conditions no guarantee will be required and other implementation procedures.
Additionally, an amendment has been made to Article 355 (repeated) of the Tax Procedure Law, whereby failure to provide a guarantee is subject to a special non-compliance penalty. Taxpayers who are required to provide a guarantee but fail to do so may be fined an amount equal to 0.3% of their gross sales for the previous fiscal period. The fine cannot exceed 10 times the amount specified in the first paragraph of Article 355, and for 2022, it cannot exceed 1,300,000 TL.
2. An Opportunity for Institutions Operating in the Istanbul Finance Center to Deduct 50% of Their Income Earned from Transit Trade from Their Corporate Tax Return.
With the addition of item (i) to the first paragraph of Article 10 of the Corporate Tax Law No. 5520, institutions operating in the Istanbul Finance Center under the Istanbul Finance Center Law are allowed to deduct 50% of the income earned from selling goods purchased from abroad without bringing them to Turkey, or from intermediating in foreign trade, from their corporate tax return.
To benefit from this discount, the income must have been transferred to Turkey by the deadline for submitting the annual corporate tax return for the relevant accounting period, and the seller and buyer involved in the intermediary trade must not be based in Turkey.
The President is authorized to reduce or increase this rate from zero to one times.
You can access the relevant Law here.
Best regards,
BİLGENER
